We previously discussed the top 10 Global Solar Panel manufacturers as a safe choice when selecting your best solar panel. The rationale was that reputable companies will survive for the next 5-10 years hence you as a consumer can actually claim your warranty if needed. However, the share price of the top 10 global manufacturers has been dropping by a huge 80% since the start of 2011.The following table shows the top 8 listed solar panel manufacturers on the stockmarket with their market value in Bilion USD and the percentage loss since January 2011. Please note that Sharp and Kyocera are excluded since they are conglomerates:
Market Value in $Bn on 9th of April 2012 and % Loss since Jan 2011
1. Suntech (STP) $0.5Bn -68%
2. First Solar (FSLR) $1.8Bn -85%
3. Yingli (YGE) $0.5Bn -67%
4. Trina Solar (TSL) $0.5Bn -74%
5. Canadian Solar (CSIQ) $0.1Bn -76%
6. Sharp (not available)
7. Jinko Solar (JKS) $0.1Bn -74%
8. Sunpower (SPWR) $0.9Bn -57%
9. Hanwha SolarOne (HSOL) $0.1Bn -88%
10. Kyocera (not available)
Top 8 Solar Panel Manufacturers $4.5Bn -78%
The average decline in market capitalization of these solar panel stocks is nearly 80%. All of them reported large losses last quarter, driven by global overcapacity. According to the Wall Street Journal there is no immediate improvement in sight – they compare the yearly cost decline to that of computer memory. Also, the recent bankruptcy of Q-cells, once the world’s largest manufacturer of solar panels, does not promise much hope.
But to put things in perspective, these top 8 solar panel manufactures have a combined sales of nearly half the global market (about 10GW) and a capacity of nearly double that. At an average solar panel ex-factory price of $0.80 per Wp, this is a revenue of about $8 Billion. So you are basically valuing these firms at only half their revenue, and also well below the value of their assets.
The future of these stocks is very uncertain, and they cannot continue to post losses for the rest of the year. Increased pricing is unlikely, a doubling of demand is unlikely, hence bankruptcies like Q-cells are expected to happen to more solar panel companies- and may even hit one of these large firms. As with other cyclical (electronics) industries, solar panel manufacturers have fallen into the trap of all building the largest factories to achieve the lowest costs. Now they are experiencing the downcycle, but as with all cyclical industries things could look a lot more positive in a year’s time.